Researchers have published extensively on fintech in the opening decade of the current century. Although the amount of theoretical work is sufficiently large, yet no company could attain any significant breakthrough in practice until late 2008 when the businesses were suffering severely from Great Recession. The subsequent period witnessed a remarkable revolution demonstrating fintech disruption in financial services.
This period was the beginning of time when scores of industries started to incorporate advanced fintech. Following are the three most notable emerging trends in financial services which revolutionize data security, data analysis, transaction processing, and operational management in corporate sector.
Documented businesses in every industry rely on traditional banking for transactions. As the challenges section indicates, transaction through centralized banking carries many vulnerabilities. Blockchain is an appropriate alternative which is tested for over a decade to addresses transaction problems without leaving side-effects.
Blockchain is an instance of distributed ledger technology which defines a database to store data in distributed and shared schemes. The most notable aspect that distinguishes blockchain from other data management techniques is immutability. The technology is tamperproof unlike relational database management systems which are prone to intrusions.
This technology is revolutionizing financial services by bringing transparency and security. Transparency reflects in the fact that each stakeholder can view history of records as well as the timestamp which indicates time when a block or record was added to the chain.
Blockchain ensures data security with its architecture based on consensus algorithms. Such algorithms require consensus of more than 50% of nodes to make a new block with same transaction record. The probability of generating such a consensus is negligible.
The growth rate of data is incredible – to say the least. With the current rate, the total amount of digital data would be as big as 44 zettabytes by the end of 2020 – Raconteur reports. Besides, the data created every single day by 2025 is projected at 463 exabytes. For reference, single zettabyte is equivalent to one billion terabytes.
The creation of such a humungous amount of data is rather beneficial than alarming. As the volume of data grows, the business or the underlying industry has greater opportunities to make correct future projections.
“79% of enterprise executives agree that companies that do not embrace Big Data will lose their competitive position and could face extinction.” (Accenture)
Big Data enables financial institutions to identify patterns in market and forecast future trends. The utilization of Big Data for over a decade is proving this claim as companies are attaining meaningful insight from vast sets of data.
Bank of America introduced a virtual assistant called Erica to help clients with finding billing information and transaction records in seconds. It eliminates the need for manual input of information and search of records. Instead, it runs a predictive analytics to provide precise information. This intelligent assistant is capable of training itself. The bank expects that Erica will get as much smarter in a matter of months that it will provide recommendations as well to clients.
Artificial intelligence resonates in the corporate world more often than any other set of technologies. Financial services have the potential to take the leverage of AI far more than any industry. The degree of repetitive and non-technical tasks is way too high as workers have to speak and type more or less similar set of information to clients.
Robotic process automation addresses this challenge by automating most of the repeated tasks. Two most impressive innovations in this regard are voice assistants and chatbots. A voice assistant answers the queries of clients by replicating human speech while chatbot does the same through online real-time chats and emails.
Also Read: Robotic process automation in healthcare
Earlier, the chatbots could only answer a few questions. They would respond with limited set of answers picked from a pool. However, the use of machine learning and natural language processing (NLP) is now enabling bots to self-train themselves and respond to complicated questions as well. Self-trained bots are now frequently used in industry and ensure a significant drop in operational costs.
Fintech industry is leading a revolution in financial services sector which is barely feted like revolutions in other industries. The reason is the fact that most people are unaware of the technical intricacies involved in this revolution. The corporate sector has leapfrogged into an era where acquisition of fintech technology solutions is not a choice – rather a compulsion.
Mob Inspire can assist you in becoming a part of this evolution and in avoiding the extinction. Contact us today so that our experts will take you further.